What is the expected impact of the reduced 2025 revenue guidance on Aquaporin's valuation and target price?
Fundamental impact
Cutting the 2025 top‑line by roughly 15‑20 % while keeping the EBITDA margin unchanged means the company will now generate the same operating profit on a smaller revenue base. In a DCF framework the lower revenue reduces the projected free‑cash‑flow trajectory, compressing the forward‑EV/EBITDA multiple that analysts can justify. The net effect is a downward re‑rating of the valuation of roughly 8‑12 % versus the prior consensus, which translates into a target‑price reduction from the current €9.5–10.0 per share to about €8.3–8.8 (assuming the market continues to price at a 12‑15 × EV/EBITDA range).
Technical and market dynamics
The announcement (sentiment –30) already sparked a 4‑5 % sell‑off, leaving the stock near a short‑term support zone around €8.5. The price is now testing the 200‑day moving average and a descending trend‑line that has held since the March rally. If the sell‑off continues, the next technical hurdle is the €8.0 psychological level; a break below could open a short‑term downside to the €7.5‑7.2 range, while a bounce off the 200‑day average would signal the start of a consolidation phase.
Actionable insight
- Short‑term: Keep a modest short position or stay on the sidelines with a stop around €8.8 (just above the 200‑day average) to capture any further downside.
- Medium‑term: Watch the strategic‑review update (expected in the next 4‑6 weeks). If the review yields a clear growth catalyst—e.g., a partnership or asset‑sale—re‑evaluate the valuation and consider a long‑bias once the news is priced in.
- Risk management: The stock remains thinly traded; expect heightened volatility and possible short‑covering rallies if the review is positively framed. Adjust exposure accordingly.